The COVID-19 pandemic has damaged the airline and automobile sectors around the globe. Fortunately, the rollout of vaccines in late 2020 has sparked hope in the general population. Today, I want to look at two top TSX stocks that have gained momentum in the final weeks of this momentous year. Air Canada and BlackBerry went through rough patches in 2020, but are finishing strong.
Which is the better stock to own in 2021 and beyond?
The case for Air Canada stock
Air Canada is the top domestic airliner and has emerged as one of the top growth stocks on the TSX during the 2010s. Its shares have plunged 46% in 2020 as of close on December 14. The stock is up 34% over the past month. Airliners have been pulverized by the pandemic, but the vaccine rollout has the industry hopeful for a return to normalcy in 2021.
Earlier this month, I’d discussed why Air Canada stock was poised to erupt in the months and years ahead. The airliner had rattled off record earnings in quarter after quarter coming into 2020. There will be a recovery period when this pandemic is history, but airliners should benefit from a global population that will be itching to travel.
In the near term, investors will still need to brace for some turbulence for airliners. Although the vaccine has arrived, it will take time before a satisfactory number of Canadians are inoculated. There are murmurs that the United States-Canada border could open in the spring. That is a good time for investors to expect things to loosen for Air Canada and its peers.
Why BlackBerry has surged in December
Canadian technology stocks like Shopify and Kinaxis put together a great performance in the face of the pandemic. However, BlackBerry was either struggling or static for most of the year. The Waterloo-based company’s exposure to the automobile sector caused its earnings to falter. In December, its fortunes turned, and the stock is attracting enthusiasm again…CLICK for complete article
The Past Week, In A Nutshell
What Happened: In light of hopes for a sustained economic rebound, U.S. broad market indices pushed to new all-time highs.
Remember This: “[T]he third wave is now hitting the economy harder than we thought and that the damage is likely to keep adding up in coming months, until we get vaccines widely deployed,” said Brad McMillan, chief investment officer for Commonwealth Financial Network.
“The two key factors in how bad it will get are whether infection growth crests and whether the federal government steps in with another round of stimulus.”
During much of the week, participants lacked the conviction to break through to new highs.
However, conditions markedly improved after Thursday’s long liquidation on Pfizer Inc news flushed out weak-handed participants, and responsive buyers surfaced. The quick recovery of the balance-area high suggested the news was immaterial.
During Friday’s regular trading, initiative buyers extended range — through the $3,682.00 balance-area high — separating and accepting value above the week-long balance-area.
Therefore, given the acceptance of higher prices, participants must monitor whether S&P 500 spends time trading above the $3,682.00 balance boundary. An initiative drive below that figure would portend a potential response at the $3,667.75 high-volume node. Auctioning further below that value would denote a clear change in conviction. The line in the sand is the $3,640 balance-area boundary. Auctioning below that figure puts the rally on hold.
All in all, though sentiment and positioning imply limited potential for upside, the S&P 500 remains in an uptrend after confirming a multi-month balance-break.
In a commentary, Nasdaq’s Phil Mackintosh discussed new proposed actions from the SEC…CLICK for complete article
The greatest validator for a successful startup’s technology is a customer.
For recently TSX-V listed Plurilock Security, they count the United States of America as one of the first to buy into their next-generation identity authentication technology.
This includes government contracts with the US Army and US Department of Defense. The company also announced this year its third contract with the US Department of Homeland Security to continue its development of authentication and anomaly detection tools. The true potential of Plurilock’s solution, based on behavioural biometrics and artificial intelligence (AI), is its ability to cross all borders, industry verticals and pre-existing commercial relationships.
“Our success with the U.S. federal government is really a reflection of our technology’s value. We didn’t have any government experience or relationships yet succeeded despite not being ingrained in this market which I think is even more impressive and powerful,” says Ian Paterson, CEO of Plurilock.
The U.S. federal government relationship is a great validator and made “people stand up and take note of what we’re doing,” adds Paterson. Plurilock’s solution is targeted to middle-market companies and larger, with a focus on financial services, health care, critical infrastructure and government sectors.
In September, Plurilock signed on a senior company in the financial services sector following an extensive series of proof-of-concept and testing deployments. Of note, the U.S.-based customer knocked on Plurilock’s door first. Plurilock is now expanding its sales and marketing resources to aggressively go after market share in the commercial space.
“We’ve seen a lot of traction in the financial services sector, specifically mid-sized institutions. It’s a mix of asset managers and regional banks. In the U.S., particularly for institutions in that 1,000 to 50,000 employee size, there is a real unmet need for innovative AI driven security products like ours. There are 3,000 institutions in the U.S. alone that are in our sweet spot.”
Plurilock’s next-generation technology solution focuses on identity and access management, a realm traditionally done with physical devices and PIN codes or passwords. Through behavioural capabilities, Plurilock’s products can authenticate people at the time of login as well as continuously throughout the day – always-on security.
Plurilock’s patent-protected technology is the result of more than 35,000 hours of university research by a team comprised of the foremost peer-reviewed experts in their field. The company went public in September to scale growth through expanded and dedicated sales/marketing resources and strategic acquisitions.
“Cybersecurity is a team sport. You can’t as a business buy one cyber security solution and be safe. Larger companies may have two dozen different end-point solutions and need a whole team of cybersecurity vendors in order to be secure,” says Paterson. “We are seeing a trend toward vendor consolidation. For Plurilock, we want to add products and services to round out our offering. We’re interested in building a big business here.”
Air Canada (TSX:AC) stock has been on a massive hot streak in recent weeks. Ever since Pfizer announced its vaccine had a 90% effectiveness rate, the stock has been soaring. Airlines stand to benefit from an end to the pandemic, so the recent price action is likely related to Pfizer’s announcement. The rally may also be related to AC’s third-quarter earnings, which showed a much smaller net loss than prior quarters.
So far, so good. A vaccine is coming, Air Canada is paring its losses, and AC stock is soaring. Sounds like a buy, right?
Maybe. But before you get too excited, it’s time for a reality check. We’re currently in the middle of a second wave of COVID-19 that once again threatens air travel. That includes travel within Canada as well as international travel. Just recently, Newfoundland and PEI announced that they were withdrawing from the “Atlantic travel bubble,” a regional agreement that allowed free travel within the Maritimes without self-isolation. That kind of thing tends to put a dent in airline revenues. And it seems to be accelerating.
A vaccine could take a while
Another factor investors need to be aware of is the fact that recent vaccine trials don’t mean that a vaccine will be widely available soon. A 90-95% effectiveness rate is definitely a good sign, but there are still all the regulatory and logistical issues that come with getting a vaccine to market. Regulators have to approve the vaccine, mass production needs to proceed, local jurisdictions need to procure their supplies. All of these things take time. This is one of the main reasons that public health experts are eying next spring for vaccine deployment, not December or January…CLICK for complete article
The buoyancy seen in the Chinese electric vehicles stocks faces risk in the wake of regulatory scrutiny by China.
What Happened: Chinese EV makers Nio Inc – ADR, Xpeng Inc – ADR and Li Auto Inc. which were all in record territory ahead of Tuesday’s modest pullback, are trading notably lower Wednesday morning.
The weakness is attributable to negative regulatory tidings out of China, which dragged China-listed new energy vehicle stocks sharply lower in the afternoon session.
The National Development and Reform Commission has sought that its local branches submit production and investment information for electric vehicle projects in their respective territories over the past five years, Nikkei reported, citing Chinese business publication Yicai, which in turn quoted a government document.
The commission specifically demanded details on projects of China Evergrande New Energy Vehicle Group and Baoneng Group, a conglomerate based out of Shenzhen…CLICK for complete article
In 2020, Warren Buffett has been lying low. Preferring to play his cards close to his chest, he hasn’t revealed much about what he’s been buying and selling. However, once every quarter, he is forced to reveal what he was up to in the quarter before. As it turns out, the “Oracle of Omaha” massively reduced his exposure to Canadian stocks this year.
In the second quarter, Warren Buffett sold out of Restaurant Brands International completely. That move was well publicized, leaving two Canadian stocks in his portfolio. He has trimmed both of those positions throughout the year as well. If this continues, Buffett may be out of Canadian stocks completely by the end of the year. That’s not a great sign for the Canadian economy but — as you’re about to see — there’s a silver lining. CLICK for complete article